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Defaults on Real Estate Mortgages Hit Ksh57.7 Billion On Covid-19 Effects

real estate
[PHOTO/ COURTESY]

Defaults on real estate loans such as mortgages rose by Ksh5.1 billion to Ksh57.7 billion by the end of 2020.

This according to the latest data from the Central Bank of Kenya (CBK), which reveals that car owners and investors in the transport industry defaulted loans rose to Ksh27 billion.

The borrowers now face forced recovery of the loans, following the expiry of moratoriums instituted by state that offered temporary relief.

“For the quarter ending March 31, 2021, banks expect to intensify their credit recovery efforts in all economic sectors. The intensified recovery efforts are aimed at improving the overall quality of the asset portfolio,” said CBK.

Read: Real Estate Company Partners With Doctors Of Hearing To Help Those With Hearing Problems

According to the survey, trade and personal and household loanees will be the most affected when recovery measures are instituted.

“The main sectors that banks intend to intensify credit recovery efforts in order to enhance reduction of non-performing loans are Trade (89 percent), Personal and Household (87 percent), Real Estate (84 percent), Transport and Communication (84 percent), and Building and Construction (84 percent),” adds the CBK survey.

Recovery efforts have seen several houses around the city. Vehicle owners ranging from personal cars, commercial and PSVs have not been spared either.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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